TALLAHASSEE - As the Seminole Tribe offers online sports betting in Florida, a dispute over fantasy sports is heating up💳 amid efforts by gambling regulators to rein in companies accused of operating potentially illegal betting games.
The Florida Gaming Control Commission💳 in September sent cease-and-desist letters to three fantasy sports operators, threatening legal action if the sites didn't immediately stop.
But Sen.💳 Joe Gruters, R-Sarasota, wants the commission to explain why the businesses were targeted and to clarify why they could be💳 breaking the law while the biggest players in the industry - DraftKings and FanDuel - aren't. The senator raised the💳 issues in a Dec. 18 letter to the commission's executive director, Lou Trombetta.
Gruters pointed to the cease-and-desist letters Trombetta sent💳 to Underdog Sports, LLC; SidePrize LLC, also known as Performance Predictions LLC, doing business as PrizePicks; and Betr Holdings, Inc.
Gruters'💳 letter asked why "the two largest fantasy sports operators" in Florida did not receive similar threats from the commission.
"The letters💳 definitively state that 'betting or wagering on the result of contests of skill ... including fantasy sports betting, is strictly💳 prohibited and constitutes a felony offense.' Notably, however, the commission's public position is less definitive. In the FAQs (frequently asked💳 questions) on the commission's website, the commission states that 'wagering on fantasy sports' is 'probably not' legal. I am concerned💳 that the commission is applying an interpretation that is not supported by law and that the commission may be selectively💳 enforcing its interpretation," Gruters wrote.
Gruters told The News Service of Florida that he spoke with Trombetta about the situation and💳 asked why DraftKings and FanDuel weren't targeted.
"I guess the biggest guys have not been issued those letters. And so, for💳 me, it's just a matter of fairness. I think it should be across the board. I talked to the executive💳 director about that, personally. He was in my office. And I think he said letters were forthcoming, but I don't💳 think those have gone out yet," Gruters said in a phone interview Wednesday.
Gruters said that he understood letters would be💳 sent to DraftKings and FanDuel.
The gaming commission is "in the process of responding to Sen. Gruters' letter," Eric Carr, the💳 commission's director of external affairs, told the News Service this week.
Months after receiving the cease-and-desist letters, the three daily fantasy💳 sports operators appear to be continuing to offer games on their apps and websites in Florida.
The questions about the fantasy💳 sports companies have come in advance of the 2024 legislative session, which will start Tuesday.
The three companies targeted by the💳 gaming commission have hired a slate of lobbyists, including some of Florida's most-prominent lobbyists such as Nick Iarossi and Ron💳 Book.
Gruters said he offered to file legislation to clear up the issue but was told that the commission was still💳 "processing all the information." Florida has laws regulating gambling activities, but does not have a law specifically addressing fantasy sports.
Meanwhile,💳 Rep. Jason Shoaf, R-Port St. Joe, filed a fantasy sports measure that supporters maintain would mirror federal law. A Senate💳 version of Shoaf's bill has not been filed.
The dispute over fantasy sports also comes as the Seminole Tribe has moved💳 forward with online sports betting.
A 30-year agreement, signed by Gov. Ron DeSantis and Seminole Tribe of Florida Chairman Marcellus Osceola💳 Jr. and ratified by state lawmakers in 2024, gave the tribe "exclusivity" over sports betting - including mobile sports betting💳 - throughout the state. Under the deal, wagers could be placed anywhere in the state using mobile devices, with the💳 bets being processed on tribal lands. In exchange, the tribe agreed to pay the state at leastR$2 billion over the💳 first five years of the agreement, known as a compact. The deal also allowed the tribe to contract with the💳 state's pari-mutuel operators to offer sports betting and gave the Seminoles permission to add craps and roulette at their casinos.
The💳 agreement included an exception allowing for the operation of "fantasy sports contests."
But the fantasy games targeted by gambling regulators could💳 violate the compact, according to Jim Allen, who heads the Seminoles' gambling operations and was instrumental in negotiating the deal.
Allen,💳 the chairman of Hard Rock International and the CEO of Seminole Gaming, told the News Service that the types of💳 games operated by the three fantasy companies aren't allowed under the compact - or state law.
"We made it very clear💳 that we do not have an issue with fantasy sports, specifically with what DraftKings and FanDuel are offering. With that💳 said, when we get to Underdog, when we get to BetR and others like that, there is no doubt, not💳 just in Jim Allen's opinion, it's not just the Florida state gaming (commission) opinion, it's not just in the attorney💳 general's opinion, but 11 other states ... have flat out said what they are doing is gambling, they're taking live💳 bets, and it's illegal. And, yes, unequivocally it violates the compact," Allen said in a phone interview last month.
The tribe💳 on Nov. 7 began accepting mobile sports bets from a limited number of gamblers and went statewide in early December.
The💳 fantasy operators targeted by regulators, however, say their activities are legitimate.
"Our very popular fantasy sports platforms continue to operate legally💳 in Florida, and we are certainly not in violation of the compact," Allison Harris, a spokesperson for a group called💳 the Coalition for Fantasy Sports, told the News Service, when asked to respond to Allen's comments.
The Difference
Florida isn't the only💳 state targeting the companies, which offer games known as "pick 'em style" fantasy contests or "over/under player prop pick 'em"💳 games. Single fantasy players can choose from a set of athletes who are assigned certain outcomes for different activities, such💳 as a set number of yards or points scored. Players choose whether the athletes will score over or under the💳 specified outcomes.
DraftKings and FanDuel, meanwhile, offer games in which multiple fantasy players compete against each other by building rosters of💳 teams composed of athletes. Players earn points based on the athletes' performance.
A legal analysis provided to the Florida Gaming Control💳 Commission by Joe Jacquot, a former general counsel for DeSantis who has worked for DraftKings and FanDuel, contended that the💳 three targeted operators are breaking state law, which allows games of "skill" but prohibits games of "chance," unless authorized.
"FanDuel, as💳 a contest sponsor, merely puts up a purse, for which it does not compete. The companies that received cease and💳 desist letters do the opposite - they participate in the contest and win the prize if the contestant does not💳 correctly guess winning propositions. Indeed, they say it does not matter under federal law that the contest involves the operator,💳 but Florida law makes that very distinction," Jacquot wrote in the document obtained by the News Service.
